What Are The Most Traded Currency Pairs On The Forex Market?
What Are The Most Traded Currency Pairs On The Forex Market?, There are seven major currency pairs in the Forex market. Other brackets include cross currency pairs and exotic pairs, which are less commonly traded and all are relatively illiquid (i.e. not easily exchangeable for cash).
- Major currency pairs
The major currency pairs are the most traded, and they account for approximately 80% of the trading volume in the forex market.
These currency pairs can usually have low volatility and high liquidity.
Four major currency pairs are the EUR/USD, USD/JPY, GBP/USD, and USD/CHF.
They are associated with stable and well-managed economies, which are less prone to manipulation and have lower spreads than other pairs.
Cross currency pairs – crosses – are pairs that do not include the US dollar on What Are The Most Traded Currency Pairs On The Forex Market?.
Historically, cross currencies were converted first into the US dollar and then into the desired currency, but are now offered for direct exchange.
Most popular in trading is a derivative of minor currency pairs (eg EUR / GBP, EUR / JPY, GBP / JPY); They are usually less liquid and more volatile than the major currency pairs.
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- Exotic currency pairs
Exotic coins are currencies from emerging or smaller economies, paired with a major symbol.
Compared to the major currencies and major crises, exotic currencies are more risky to trade because they are less liquid, more volatile, and more prone to manipulation.
It also contains broader margins and is more sensitive to sudden shifts in political and financial developments.
The Most Commonly Traded Currency Pairs in the Forex Market by Volume
Currencies must be traded in pairs. Mathematically, there are 28 different currency pairs that can be derived from just eight currencies alone. However, there are about 18 currency pairs that are conventionally quoted by forex market makers as a result of their overall liquidity. These pairs are What Are The Most Traded Currency Pairs On The Forex Market?:
The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.
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The table below shows several different currency pairs from each chip, as well as some nicknames coined by the traders themselves.